2012 (11) TMI 320 - AT - Income Tax

Deduction u/s.80(IA)(4) - Held that - As assessee s case is arguable & he had paid substantial tax (more than 80%) against the demand created by the A.O. the demand is stayed till the disposal of appeal which are coming up for hearing of 17.10.2012 in all the assessment years i.e. A.Y. 07-08, 08-09 & 09-10 or for the six month from the order of stay whichever is earlier. The assessee should not seek adjournment of hearing without compelling and justifiable reason and if a paper book is required to be filed by the assessee, the same should be filed well in advance & if these conditions are not fulfilled by the assessee, then, the stay will get vacated automatically - in favour of assessee as directed.

Summary

Issues:
1. Assessment and demand for A.Y. 07-08
2. Assessment and demand for A.Y. 09-10
3. Disallowance of deduction u/s. 80 (IA)(4)
4. Granting stay for outstanding demand
5. Conditions for maintaining the stay

Analysis:

Assessment and demand for A.Y. 07-08:
The appellant, a Limited Company in the irrigation business, filed its return for A.Y. 07-08 showing total income after deduction u/s. 80(IA)(4). The assessment completed by the A.O. in A.Y. 07-08 resulted in a demand of Rs.1,32,28,424/-. The appellant had paid Rs.60,00,000/- against the total demand of Rs.85,59,595/-. The Tribunal noted the appellant's substantial tax payment and granted a stay on the outstanding demand until the appeal's disposal, subject to certain conditions.

Assessment and demand for A.Y. 09-10:
For A.Y. 09-10, the assessment created a demand of Rs.3,16,65,698/-. The appellant paid Rs.1,20,00,000/- against the total demand of Rs.1,82,48,132/-. The Tribunal considered the appellant's tax payments and granted a stay on the outstanding demand until the appeal's disposal, similar to the A.Y. 07-08 decision.

Disallowance of deduction u/s. 80 (IA)(4):
The A.O. disallowed the deduction u/s. 80 (IA)(4) in both assessment years. The appellant argued that its case was arguable and suitable for a stay on the outstanding demand. The Tribunal, after evaluating the facts, granted a stay until the appeal's hearing, emphasizing the need for timely submission of documents and no unjustified adjournments.

Granting stay for outstanding demand:
The Co-ordinate 'B' Bench had previously granted a stay for A.Y. 08-09. Considering the appellant's substantial tax payments exceeding 80% in both years, the Tribunal stayed the demand till the appeal's disposal for A.Y. 07-08, 08-09, and 09-10, or for six months from the stay order, whichever is earlier.

Conditions for maintaining the stay:
The Tribunal set conditions for maintaining the stay, requiring the appellant not to seek adjournments without valid reasons and to file any necessary documents well in advance. Failure to comply would result in automatic vacation of the stay. The Stay Applications of the assessee were allowed based on the indicated terms.